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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI V. DURGA RAO, HON’BLE & SHRI G. MANJUNATHA, HON’BLE
आदेश / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-Puducherry, dated 28.06.2019 and pertains to assessment year 2011-12.
We find that appeal filed by assessee is barred by limitation, for which, necessary petition for condonation of delay explaining the reasons for the delay, has been filed. The learned counsel submitted that assessee could not file appeal within the time allowed under the Act, therefore, delay may be condoned. Having heard both sides and considered the petition filed by the assessee for condonation of delay, we are of the considered view that reasons given by assessee for not filing the appeal within the time allowed under the Act, comes under reasonable cause as provided under the Act, for condonation of delay and hence, delay in filing of above appeal is condoned and appeal filed by the assessee is admitted for adjudication.
The assessee has raised the following grounds of appeal:
1. The order of the Commissioner of Income-tax(Appeals) dismissing the appeal on jurisdiction as well as on merits is contrary to law, erroneous and unsustainable on the facts of the case.
2. The CIT(A) ought to have seen that the assessment order passed by a non-jurisdictional officer is void and non-est in law and thus ought to have annulled the assessment.
3. The CIT(A) ought to have seen that reopening of assessment and completion of assessment u/s.147 is untenable in law since the assessee was a traditional agriculturist and there was no income escaping assessment.
4. The CIT(A) erred in confirming the additions totaling to Rs.5,04,380/-.
5. The CIT(A) failed to appreciate that the source for investment in shares was only the agricultural income derived from operations in land in the earlier years and there being no other income-generation activity for the assessee, confirming the addition of Rs.1,56,380/- was wholly unjustified.
6. The CIT(A) further failed to appreciate that the source for the cash deposit of Rs.3,48,000/- in the bank account was also the income from agriculture and hence confirming the addition without due regard to the fact of agricultural operations by assessee is not justified.
7. The CIT(A), in any event, ought to have duly considered that the source for investment in shares and bank deposits were the agricultural activity and thus deleted the additions.
4. The brief facts of the case are that the assessment has been re- opened u/s.147 of the Act on the basis of ITS details, as per which, the assessee has made cash deposits in M/s.Axis Bank Ltd., and commodity transaction. The assessment has been completed u/s.143(3) r.w.s.147 of the Act and determined total income of Rs.5,35,060/- by making additions towards unexplained investment u/s.69 of the Act for Rs.1,56,380/- on account of investments made in shares for the reason that the assessee could not explain the source. The AO had also made additions towards cash deposits made to M/s.Axis Bank Ltd., amounting to Rs.3,48,000/- on the ground that although, the assessee claims to have made cash deposits out of agricultural income, but could not produce necessary evidences including Chitta, Adangal copy of documents of agricultural land holdings, etc. The assessee carried the matter in appeal before the First Appellate Authority, but could not succeed. The Ld.CIT(A) for the reasons stated in his appellate order sustained the additions made by the AO. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us.
5. The first issue that came up for our consideration from Ground No.5 of the assessee’s appeal is addition towards unexplained investment in shares u/s.69 of the Act amounting to Rs.1,56,380/-. The Ld.Counsel for the assessee submitted that the Ld.CIT(A) failed to appreciate the fact that the assessee has explained the source for investment in shares out of agricultural income and thus, ought to have deleted the additions made by the AO.
5.1 The Ld.DR, on the other hand, supported the order of the Ld.CIT(A).
5.2 We have heard both the parties, perused the materials available on record and gone through orders of the authorities below, including the reasons given by the AO for making additions towards unexplained investments in shares. The facts borne out from the record clearly indicate that the assessee has made investment in shares amounting to Rs.4,56,380/-, but could explain source only to the extent of Rs.3,60,000/- Therefore, the balance amount of Rs.1,56,380/- has been treated as unexplained investment u/s.69 of the Act. Even before us, the assessee could not file any evidences to prove the source for the investment.
Therefore, we are of the considered view that there is no error in the reasons given by the Ld.CIT(A), to sustain the additions made by the AO towards investment in shares and thus, we are inclined to uphold the findings of the Ld.CIT(A) and reject the ground taken by the assessee.
The next issue that came up for our consideration from Ground No.6 of the assessee’s appeal is cash deposits made to M/s.Axis Bank Ltd. The Ld.AR for the assessee submitted that when the AO has accepted agricultural income declared by the assessee amounting to Rs.3 lakhs, ought not to have made additions towards cash deposits, when assessee explains source for cash deposits out of agricultural income.
6.1 The Ld.DR, on the other hand, supported the order of the Ld.CIT(A).
6.2 We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. It is an admitted fact that the AO accepted agricultural income declared by the assessee for the impugned assessment year. Therefore, once there is no dispute with regard to the fact that the assessee has earned agricultural income, then the AO ought to have accepted the explanation of the assessee that cash deposits made to M/s.Axis Bank Ltd., is out of agricultural income. In this case, the assessee has made cash deposits of Rs.3,48,000/-, whereas the agricultural income declared for the year under consideration is Rs.3 lakhs.
Therefore, we direct the AO to accept the explanation of the assessee towards cash deposits to M/s.Axis Bank Ltd., out of agricultural income declared for the year amounting to Rs.3 lakhs. The balance amount of Rs.48,000/- remain unexplained. The assessee could not file any evidence to prove availability of source of Rs.48,000/- out of addition of Rs.3,48,000/-. Therefore, we allow relief to the assessee to the extent of Rs.3 lakhs and balance amount of Rs.48,000/- is confirmed.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced on the 22nd day of April, 2022, in Chennai.